It seems there’s one place Apple’s iPhone isn’t flying off the shelves: India. Could this mean Research in Motion (RIMM), the company behind BlackBerry, has a strong future prospect even with a falling market share in America? RIMM seems to think so.
Let’s first take a closer look at why Apple (AAPL) has a comparatively dismal market share in India’s 602 million active smartphone subscribers. Bloomberg reports the iPhone 4, which runs about $705 a piece in India and receives little marketing attention, doesn’t find the market overly worthwhile.
The country internet carriers are predominately 2G, a service not fast enough to take full advantage of the phone, and 3G is only slowly breaking ground. What’s more, “Apple products aren’t as accessible in India because consumers can’t buy iPhones, iPads and iTunes songs from company stores or its website,” only through licensed resellers.
For those very same reasons, BlackBerrys which run under $200 a pop are flourishing. “RIM’s BlackBerry Messenger instant-messaging service is popular because it was one of the first, and it functions well on networks a generation behind the speeds offered in the U.S. and Europe,” said Gus Papageorgiou, analysts at Scotia Capital to Bloomberg. BlackBerry made up 40% of India’s smart phone shipments in the quarter ended June 30.
This advantage creates a big rebound opportunity for Blackberry whose stock has lost 58% of its market value in the last year. India’s smart phone market expected to grow an average of 68% per year while salaries are on route to growing faster than any in the Asia-Pacific region this year.
An increasingly wealthy emerging market has propelled RIM, which entered India’s smartphone market in 2004, to “extend its lead over Apple after expanding distribution to 80 cities from 15 starting last year.”
Or course, when the time is right it is foreseeable that Apple will swoop in full force. But will RIM have already covered enough ground to secure a position as India’s favourite smart phone brand?
Interested in following Research In Motion? To help you analyse the company we include some of Kapitall’s tools below:
To start off, use Kapitall’s Compar-O-Matic to compare changes in average analyst recommendations of RIMM and its competitors
Use the Turbo Chart to compare RIMM’s performance against the S&P500.